Brookfield Reports Record Fundraising Quarter

Fundraising markets are ‘tremendous’ or ‘pretty brutal,’ depending on the ultimate location of fund investments, according to recent comments made by Brookfield Asset Management and Patron Capital.

The last quarter was “the best Q1 fundraising quarter we’ve ever had,” said Connor David Teskey, president and CEO of Brookfield’s renewable power and transition, during the company’s earnings call on May 8. “And in terms of the dynamics that we see driving our fundraising activity for the remainder of the year, they all stay very much intact.”

“And particularly in our real estate flagship, this is where we’re really seeing the market opening up,” he added. “And investors are seeing the upside and the rebound in that asset class and looking to get an increasing amount of exposure.”

“We raised a total of $20 billion of capital during the first quarter, which included strong first closes for our 2 flagship — 2 of our flagship funds,” said CEO and director James Bruce Flatt. “Our flagship funds, along with our private credit funds and insurance solutions channel have been among where our largest fund flows have come from over the past year. More broadly, we see continued client demand for more than 50 strategies that are in the market and expect our fundraising to continue to build throughout the year. This should lead to an excellent year for fundraising.”

One reason the company gave for the strength of fundraising is a scarcity of capital as banks pull back from traditional areas and amounts of lending.

“Continued consolidation in the asset management sector is a tailwind with clients preferring to do more with fewer, larger and more diversified global managers,” Flatt said. “The market environment is also more conducive for transaction activity. We are seeing firsthand an improving market for sales of high-quality assets. This is particularly apparent in the private equity and real estate asset classes, where transaction volume has been lighter over the past few years but is now picking up.”

Switch the geographic focus, however, and things look different. Patron Capital closed its seventh flagship opportunistic fund with about €660 million (about $712 million) in commitments and €200 million (about $216 million) in additional discretionary co-investment capital, according to PERE. A large sum, but the target had been €1.2 billion ($1.3 billion).

Keith Breslauer, founder and Patron managing director, called the fundraising experience this time “pretty brutal,” he told PERE, with 76% of money coming from existing investors and partners. “Very little new capital came in from the U.S. except for re-ups,” he said, noting that those investors were more interested in domestic opportunities than those in Europe.